Sectional Title Property: How a body corporate begins

The body corporate of a sectional title (ST) scheme is actually established automatically – at the moment when the first unit that has been sold is transferred from the developer to its new owner.

It then steadily gains more members until the last unit is sold and transferred, at which point the developer or development company ceases to be a member and passes any exclusive use areas that might still be in its name (free of charge) to the body corporate.

However before this, says Berry Everitt, MD of the Chas Everitt International property group. the developer must call the first meeting of a body corporate. This must take place within 60 days of the first transfer (even if there has been only one so far) and the other member/s must be given at least a week’s notice of the meeting.

“At this meeting, the developer is obliged to produce a copy of the sectional plan for the scheme that was approved and signed by the Surveyor General, and a certificate from the local authority stating that all rates and taxes are have been paid up to the date of establishment of the body corporate.

“The developer must also provide full records of any levy income and any expenditure by the scheme from the date of the first occupation of any unit until the date of the establishment of the body corporate – and must hand any surplus income over to the new body corporate.”

Writing in the Property Signposts newsletter, Everitt says other items to be dealt with at the first meeting include:

Approval of the financial statements relating to the body corporate from the date of establishment to the date of notice of the meeting.

  • Approval of the body corporate budget for the next 12 months.
  • The cession of any contracts that the developer entered into on behalf of the future body corporate, for example those for the provision of gardening, maintenance or security services.
  • Approval of a schedule of the replacement values of units in the scheme for insurance purposes.
  • The appointment of an accounting officer or, in the case of large schemes (more than 10 units), an auditor.
  • The election of trustees – preferably with someone other than the developer as chairman, so that the Sectional Title unit owners really can begin to take over control of their scheme.

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